Consumer Discret Sel Sect SPDR® Fd has several promising attributes that may appeal to sustainability-focused investors.
The ESG risk of Consumer Discret Sel Sect SPDR® Fd's holdings is comparable to its peers in the Consumer Goods & Services Sector Equity category, thus earning an average Morningstar Sustainability Rating of 3 globes. Funds in the same category rated 4 or 5 globes tend to hold securities less exposed to ESG risk. ESG risk provides investors with a signal that reflects to what degree their investments are exposed to risks related to material ESG issues, such as climate change and inequalities, that are not sufficiently managed. ESG risk differs from impact, which is about seeking positive environmental and social outcomes.
One key area of strength for Consumer Discret Sel Sect SPDR® Fd is its low Morningstar Portfolio Carbon Risk Score of 7.51 and very low fossil fuel exposure over the past 12 months, which earns it the Morningstar Low Carbon Designation. The fund is therefore well positioned to transition to a low-carbon economy. Currently, the fund's involvement in fossil fuels is negligible, and compares favorably with 0.35% for its average peer. The fund has little exposure (1.96%) to companies with high or severe controversies. From bribery and corruption to workplace discrimination and environmental incidents, controversies are incidents that may negatively affect stakeholders, the environment, or the company’s operations.
One potential issue for a sustainability-focused investor is that Consumer Discret Sel Sect SPDR® Fd doesn’t have an ESG-focused mandate. Funds with an ESG-focused mandate are more likely to align with the expectations of an investor who cares about sustainability issues.